Texas Windstorm Insurance Association (TWIA) funding issues will be the Property Casualty Insurers Association of America’s (PCI) top legislative priority in its Southwestern region, the insurer group announced. The Southwestern region includes the states of Arkansas, Oklahoma and Texas. Automobile insurance, workers’ compensation and credit scoring will also be on PCI’s agenda in all three states.
“TWIA is considerably under-funded and as long as we maintain the current funding mechanism, ultimately the state’s financial future is at risk,” said Joe Woods, PCI’s assistant vice president and regional manager. “We are urging that Texas learn the lesson from the state-run property insurers in Florida, Louisiana and Mississippi which were not able to address their funding issues prior to hurricanes Katrina and Rita and are now operating with massive deficits. TWIA has $1 billion in funding, but that pales in comparison to the potential losses that could be caused by a major storm or multiple storms hitting the Texas coast. PCI will support efforts to establish new funding mechanisms but will oppose expanding funding that includes cross line subsidies.”
Automobile insurance issues will also be a priority in the region. In Texas the major insurance reforms of 2003 had the goal of placing all insurers under the same rating and underwriting rules. However, there were a few exceptions such as the one that only allows county mutuals to use moving violations for automobile insurance ratings purposes.
PCI favors having all insurers operate under the same rules and will pursue legislation to level the regulatory playing field for all insurers on this rating issue. Research indicates that moving violations are very predictive of future risk of loss. Because this information adds significantly to insurers’ ability to accurately assess risk, if insurers other than county mutuals were allowed to use moving violations as a rating factor, they too would be able to develop more refined risk classification plans. As a result, drivers without moving violations will no longer subsidize those higher-risk drivers with violations.
In Oklahoma uninsured motorist issues will be examined in the upcoming legislative session. PCI will support legislation that streamlines the forms for the selection or rejection of uninsured/underinsured motorist coverage. As legislators examine strategies to reduce the number of uninsured motorists, PCI will seek to ensure that the measures will be effective and won’t place unnecessary or costly requirements upon insurers.
PCI also anticipates that it will be involved with workers compensation and insurance scoring issues in Arkansas, Oklahoma and Texas.
Legislative sessions are scheduled to begin in Arkansas on Jan. 8, Texas on Jan. 9, and Oklahoma on Feb. 5.
Source: PCI
Topics Mergers & Acquisitions Catastrophe Carriers Natural Disasters Texas Legislation Windstorm Oklahoma Arkansas
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